Observations of the legal scene from the Cornhusker State, home of Roscoe Pound and Justice Clarence Thomas' in-laws, and beyond.

Saturday, February 02, 2008

Omaha are Jiffy Lube franchisee files Chapter 11. New Hampshire Business Review. Heartland Automotive Services Inc. of Omaha, Neb., owner of several Jiffy Lube locations around the country – including West Lebanon, N.H -- has filed for Chapter 11 bankruptcy protection.
Heartland is the largest Jiffy Lube franchisee in the country, according to its Web site, and operates some 438 sites in 20 states across the country including the Boston area.
The company filed for Chapter 11 protection at the United States Bankruptcy Court for the Northern District of Texas on Jan. 7 in order to restructure its financial situation and resolve issues with its franchisor, Houston, Texas-based Jiffy Lube International.
Ralph Tschantz, senior vice president of marketing for Heartland, said its stores, including the one in West Lebanon, will remain open during the proceedings.
He also said he is not expecting a reduction in workforce.
“Hopefully, consumers will notice no difference in service,” said Tschantz. “We also hope our employees will continue to have confidence in offering that service. It should be business as usual.”
A man who answered the phone at the West Lebanon location but said he did not wish to be identified, confirmed that the site was operated by Heartland and was expecting to remain open during the reorganization.
He also said he was not anticipating any layoffs, in fact, he said he needed to hire about five more employees to add to his current staff of 10.
According to a statement on Heartland’s Web site, the company filed for Chapter 11 because of what it calls a “breakdown of negotiations with Jiffy Lube International to resolve long-simmering disputes regarding the companies’ relationship” over advertising and marketing, and support from the franchisor, product pricing from JLI’s parent, Shell Oil Co., and expansion strategies.
Economic pressures in the volatile gas and oil market were also cited as reasons for the filing.
Heartland said it anticipates going back to the negotiating table with JLI after the initial stabilization phase of its reorganization, which was to go heard in court on Jan. 23. If settlements still can’t be reached on the issue, Heartland said it will seek a rejection of its franchise agreements and rebrand the business.
Heartland said in the statement that it had $8 million in cash on hand at the time of the filing.
Representatives of JLI did not return phone calls by deadline.